New Delhi: The Infosys board today approved the share buyback plan of up to Rs 13,000 crore to reward shareholders, a move that comes a day after CEO Vishal Sikka resigned citing slander by company founders.   It will buy back 11.3 crore shares at Rs 1,150 apiece, returning cash to investors at almost 25 per cent premium to the Friday's closing price of Rs 923.10, the Bengaluru-based company said in a stock exchange filing.   

The company's first-ever buyback is second only to the Rs 16,000 crore share repurchase by its bigger rival Tata Consultancy Services (TCS) announced in April this year.   

Infosys had said yesterday that Sikka -- its first non- founder CEO of the company -- had the support of the board but was forced to leave following what the board called the "misguided" campaign by founder NR Narayana Murthy.   

The buyback size is 4.9 per cent of paid-up equity capital of the company. TCS offer size was 3 per cent of its paid-up equity capital, while Wipro -- which will undertake a share buyback later this year -- is 7.06 per cent of the paid-up capital.   

Infosys has set up a 7-member committee which includes co-chairman Ravi Venkatesan, Executive Vice chairman Vishal Sikka and interim CEO & MD UB Pravin Rao to oversee the process of the buyback offer.   

The timeline and other details will be announced in due course, Infosys said, adding that the buyback is subject to approval of the shareholders by way of a special resolution. Prior to the TCS buyback, Reliance Industries had come out with biggest to-date share buyback of Rs 10,440 crore between February 1, 2012 and January 19 2013. 

However, it bought back shares worth only over Rs 3,900 crore through open market purchases, achieving about 38 per cent of the target. The stock had gained 8 per cent during the buyback period. Infosys said that given the significant shareholding of the US residents through ADS' and equity shares, it was necessary to obtain exemptive relief from the American market regulator US SEC on certain aspects of the tender offer procedures.   

This is due to conflicting regulatory requirements between Indian and US laws for tender offer buybacks and it has been obtained, Infosys explained. Infosys had announced in April that it will pay up to Rs 13,000 crore to shareholders during the current financial year through dividend and/or share buyback.   

Share buybacks typically improve earnings per share and return surplus cash to shareholders, while also supporting share price during period of sluggish market condition. Infosys had cash and cash equivalents worth over USD 3.5 billion on its books as of June 30, 2017.   

It said the buyback offer size is 20.51 per cent of the total paid-up equity capital and free reserves of the company as on June 30, 2017. The Committee on buyback also includes CFO MD Ranganath, Jayesh Sanghrajka (Deputy CFO), 

Inderpreet Sawhney (General Counsel) and A G S Manikantha (Company Secretary). A number of tech companies have announced share buyback programmes this year to offer returns to shareholders. PTI